January 28, 2012

Listening to the Complaints

Okay IRS, we’re registered and testing has begun. It’s time for you to use the info we are giving you to protect taxpayers and good preparers from the preparers not following the rules.

I bet you know who I’m talking about. This tax chain has received a lot of media attention. Near riots at their offices tend to do that. Clients are alleging many problems with some offices but I just want to focus on one complaint, filing returns with pay stubs.

This company offers loan based on pay stubs. Some taxpayers who took advantage of that program are being told that their return had already been filed when they go in with their W-2s. Others, who try to use a different preparer, are learning when their return is rejected that there is already a return on file. These taxpayers are alleging they didn’t give permission for their return to filed. (If there is a signed 8879, did they sign it knowing what they were signing or was it just another paper in all the loan papers?)

So IRS, are you investigating these offices? It’s your rule; returns can’t be e-filed without the W-2s, W-2Gs and 1099R to back up the income. Are you contacting the taxpayers in the stories to get more info? Are you contacting, or investigating at all, reports from other preparers about tax offices filing with pay stubs? Have you contacted the news outlets with educational materials about filing before the taxpayer has their W-2s and what to do if it happens? Are you running reports for returns rejected because a prior return was filed and looking for trends?

E-filing without the W-2s/1099R may sound like a little infraction but what bigger issues will turn up under investigation? Reading some of the taxpayer’s stories make me wonder about fraud on the part of the tax office. Is that a big enough issue to get you involved? And if they aren’t following the rules about e-filing what about their EITC due diligence, Section 7216 forms and other paperwork preparers have to do.

I’m not advocating a witch hunt against the company but looking into allegation of misconduct at specific offices. You owe it to all the good preparers.

Disclaimer

Disclaimer

A reader should seek advice from an independent tax adviser with respect to the information on this blog based on the reader’s particular circumstances. This advice is intended to be general information and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS regarding the transaction or matters discussed here.